Thx
EPS of 78c missed estimates of 85c; revenue of $10.0B beat estimates of $9.65B. EBITDA of $723M missed estimates by 9%. Magna's full-year earnings still risk missing consensus as auto production cuts deepen in the second half. Magna's updated outlook appears a bit overly optimistic to us, omitting the potential impacts of tariffs, affordability challenges and weakening demand that will likely weigh on second-half sales and production. Magna assumes only a 2.5% drop in North American output vs. some analysts' calculation of a 5% decline. President Donald Trump's auto tariff relief may aid Detroit automakers with meaningful US assembly presence, yet uncertainties remain around foreign automakers' imports and reshoring. MG guidance largely hinges on FX tailwinds from a strong euro and Canadian dollar, with margins still under pressure. This sounds a bit gloomy, but the 24% YTD decline in the stock at 7X earnings and 5.7% yield we think reflects a lot of uncertainty already.